Summit County staffers back sales tax increase
June 1, 2018
The Summit County Council pointedly asked county staffers on Wednesday whether they personally support a sales tax increase to secure additional funding for transportation-related projects. They overwhelmingly replied, "Yes."
The five-member panel resumed its discussion about imposing two new local option sales taxes to support the county's transportation goals at their most recent meeting. Last month, county staffers first introduced the new tax options, which are a result of an amended 2017 bill Utah Gov. Gary Herbert signed into law on March 22. S.B. 136 made modifications to local option sales taxes for transportation and authorized a new sales tax for transit.
While the Council is not required to seek voter approval to implement the new taxes, the elected officials were primarily concerned with how an increase would be received.
The two taxes the county is considering would represent a 0.25 and 0.20 percent increase to the current sales tax rate in Summit County, respectively. County Councilors are facing a June 30 deadline to enact the 0.25 percent transportation infrastructure tax to reap its full benefits. The county may impose the 0.20 percent tax for transit capital expenses beginning in July of 2019.
Some of the projects that the county could fund with the revenues secured from the new taxes include extending the Electric Express, a connection between Silver Creek and Bitner Ranch roads, and extended transit services to underserved areas of the county.
"The Legislature has taken this out of the referendum process and has allowed counties to take it on their own," Councilor Roger Armstrong said. "I don't think we can do this full speed without getting some kind of feedback."
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The 0.25 percent transportation infrastructure tax would amount to about a $45 annual increase for residents, with that number varying for visitors. The taxes would not apply to unprepared food items or gas, but it is unclear how the increase would affect larger purchases, such as a car.
Janna Young, deputy county manager, said staff has reached out to all of the mayors in the county, as well as the Park City Chamber/Bureau, for feedback.
"What we heard from the Chamber is that most tourists and individuals are not comparing sales tax rates when deciding where to go," she said. "Where we might see an impact is in group sales for larger conferences where people are comparing rates and trying to find the best deal."
Derrick Radke, public works director, endorsed the sales tax increase. But, he also acknowledged the burden tax increases place on residents. He said, "No one likes to pay extra taxes. I don't like to do it." But, he said the last few increases have been "relatively small chunks" that allow the county to accomplish more projects.
"When we are in little meetings amongst our staff and talking about projects and how much this will cost, we often talk about how if we only had this incremental amount we could do this or that," he said. "This seems like a good tool. Every little piece that we can pull together gives us the ability to do something else special for our community to alleviate traffic concerns and do good alternative transit things."
The public works department plans to spend $2.5 million on street overlays and another nearly $900,000 for seal coats over the next year, Radke said. He said the increase could fund up to one year's worth of maintenance projects and nearly double the road funds for municipalities.
"We have lost $500,000 in funds over the last three years, and I don't think we will get those back," he said.
County Manager Tom Fisher said the County Council has made transportation a priority over the last three years and the increases would further support what the Council wants to achieve.
"From strictly a county staff point of view, given your goals, we would suggest imposing those taxes," Fisher said.
Fisher also suggested the County Council, as well as staff, be able to clearly articulate what projects the increases will fund. He added, "I think it is very important that you can talk about what is promised and what is not promised."
County Council members refrained from sharing their thoughts on the increase. Some members still seemed apprehensive about imposing additional sales taxes, however.
Staff has urged County Council members to make a decision on whether or not to impose the 0.25 percent transportation infrastructure tax before June 30. If the County Council chooses to implement it before July 1, the county would get to keep 100 percent of the revenues generated until June 30, 2019, or about $3.6 million. After that, the municipalities would receive a little more than $2.6 million annually, with Park City taking the largest chunk — $2.4 million.
Matt Leavitt, Summit County's finance officer, reminded Council members that waiting to make a decision will affect the amount of money that is received.
"The best we can do right now is about nine month's worth of revenue," he said during the meeting. "But, if you start pushing this out month after month you will lose that."
Another point that staff has warned the County Council about is that the Legislature could implement the taxes on its own if counties decide not to. Staffers warn that the county would not likely have a say in where the monies are spent if that happens.
County Council member Glenn Wright said the Legislature "passed the buck on some serious discussions" to the counties.
"But, we get to decide what we do with the money if we impose this," he said.